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Wednesday, 29 August 2012

As Qatar Telecom (Qtel) QTEL.QA dangles a $2.2 billion bait to persuade minority shareholders in its Kuwaiti unit Wataniya (NMTC.KW) to sell out, it knows one major investor is positioned to frustrate its goal of 100 percent control.

Step forward the Kuwait Investment Authority (KIA), the sovereign wealth fund whose 23.5 percent stake in Wataniya makes it the second biggest shareholder and puts it in prime position to decide the fate of Qtel's offer for the 47.5 percent it does not already own.

Qtel bought its controlling stake in 2007 but has now decided to seek full control, capitalising on Wataniya's weak share price and completing the takeover of a company with attractive growth prospects in emerging markets such as Algeria and Tunisia.

Turkey has identified a unique selling point as a European country – it wants to project itself as an emerging Asian market with a strong position in the Middle East. It should. It is. It has.
For a nation that spent much of the 20th century seeking adoption from Europe and being spurned, it has spent much of this century rediscovering old trading relationships with eastern neighbours. That has proved to be a wise and fruitful bet, as Europe wallows in austerity triggered by the Great Recession while $100 oil has spurred an economic boom in the energy-rich Arab states.

Dubai's bourse halted a three-day decline on Wednesday as bargain-hunters returned but trading volumes dropped to a four-week low, while most Gulf markets were flat in lacklustre trade ahead of Friday's U.S. Federal Reserve symposium, which may signal whether the Fed plans more stimulus.
Dubai's index gained 0.7 percent, heading back towards Thursday's 16-week high. Bellwether Emaar Properties
rose 1.2 percent, Deyaar Development added 2.6 percent and contractor Arabtec rose 1.5 percent.
"A lot of people are looking to be long even more in the region -- offshore investors are still not in the region, it has just been mainly retail activity," said Ibrahim Masood, senior investment officer at Mashreq Bank. So any weakness in the market will attract investors, he added.

When Abu Dhabi's biggest bank issued a $750 million bond in August, strong investor demand underlined how well most Gulf banks are riding out the global financial crisis. The issue also sent another signal: that the region's debt market is growing strongly and, increasingly, integrating with overseas markets.
The seven-year bond from National Bank of Abu Dhabi, which attracted about $4.5 billion of orders from investors, was issued in the third week of the Muslim holy month of Ramadan. In past years, the Gulf bond market has slowed dramatically during Ramadan, as fasting traders and investors reduce their working hours. So the fact that NBAD's bond emerged during Ramadan this year showed how the market's expansion is changing
issuance and trading patterns, analysts and traders said.

By introducing new rules on the sale of foreign funds, the United Arab Emirates aims to shield its investors from losses as global markets struggle. But the country risks damaging its role as a hub for asset management in
the region.
The rules, which will take effect on an unspecified date when they are published in the official gazette, transfer
primary responsibility for overseeing investment funds to the Securities and Commodities Authority (SCA), the national financial regulator, from the central bank.
They cover both the promotion and sale of foreign funds in the UAE, and requirements for offering and launching new local funds. Collectively they mark one of the biggest changes in UAE financial regulation since the country's corporate debt crisis erupted in 2009.

Egypt's benchmark index pauses after a four-day rally that pushed it to a 24-week high, with investors taking advantage of high prices to unload some of their shares, traders say. The index inches down 0.3 percent to 5,308 points.
On Wednesday, the market closed at its highest since March 11 on continued optimism that the country's political situation was stabilising and international donors such as the IMF and Gulf countries were lining up to help its economy.
"There was profit taking soon after the beginning of the session, and there will probably be another fall tomorrow before shares start rising again next week," says Hisham Metwalli of Arab Finance Brokerage.

Qatar Islamic Bank (QIB) is planning a sukuk issuance programme of up to $1.5 billion, a company statement said on Wednesday. The bank will seek shareholder approval of the plan in a meeting on Sept. 16.

"A consent from the quorum at the General Assembly will allow QIB to further process necessary approvals from the relevant authorities in Qatar with regards to potential Sukuk issuances under the Programme in the future," the emailed statement said.

The lender last tapped global debt markets with a $750 million sukuk in 2010, which carried a profit rate of 3.856 percent; the sukuk was yielding about 2.35 percent on Wednesday, according to Thomson Reuters data.

Bank Sohar, the youngest Omani bank that was aggressive in expanding business and branch network, is planning to float its RO10 million rights issue next month, if everything goes as per the plan.

The rights issue will take the bank's paid up capital to RO110 million, from RO100 million now. The shares will be offered at a price of 102 baisas, which include two baisas per share to cover expenses. The rights entitlement is on a 10:1 ratio and the proceeds of the issue will be used for raising the required minimum capital for setting up an Islamic banking window, in line with the requirements of the Central Bank of Oman (CBO).

The property market, hit hard during the fallout from the global financial crisis, is crucial to the continuing economic recovery of the UAE.

There have been some signs, at least in some parts of the sector, that prices and rents are increasing once more. Alan Robertson is the chief executive for the Middle East and North Africa (Mena) at Jones Lang LaSalle, a global group specialising in property consultancy, management and investment.

Here, he gives a snapshot view of the health of the property business in the Emirates and the region.

Norway has joined forces with Qatar in opposition to the $70bn merger between commodities trader Glencore and miner Xstrata, further threatening one of the biggest deals in the natural resources industry over the past decade.
Norges Bank Investment Management, the manager behind Norway’s oil-backed sovereign wealth fund, has spent more than $500m over the last few weeks buying Xstrata shares, according to regulatory fillings.

Kuwait’s benchmark stock index rose to the highest in more than a month on bets that the gauge’s decline to an eight-year low earlier this month was overdone.
Agility (AGLTY), the Kuwaiti storage and logistic company, and Islamic lender Boubyan Bank KSC (BOUBYAN) rose the most in two weeks. National Mobile Telecommunications Co. (NMTC), also known as Wataniya Telecom, closed at the highest in four and a half years after parent Qatar Telecom (QTEL) QSC made a cash offer for all of the company it didn’t already own. The Kuwait Stock Exchange index rose 0.9 percent to 5,839.45, its highest close since July 22. The gauge fell to its lowest in eight years on Aug. 12. The Bloomberg GCC 200 Index was down less than one percent.
Investors held back during Islam’s holy month of Ramadan and “now feel more comfortable buying shares that would benefit if a rebound happens,” Carlos Ribeiro, Gulf Bank KSC (GBK)’s chief financial officer said by telephone. Investors are picking “particular companies in very particular industries” that will be part of a rally after the dip in the index, he said.

Arabtec Holding's prospects may be bright but the UAE's biggest builder is rapidly losing favour with analysts.

The construction firm based in Dubai surprised the market with a loss of Dh11.6 million during the second quarter, which it attributed to the costs of moving equipment and staff as it geared up for projects in Saudi Arabia.

Despite the loss, Arabtec's half-year results represent a 30.4 per cent improvement on profits recorded during the same period last year.

A British developer released from jail in Dubai last month after going on hunger strike made a surprise court appearance in the emirate yesterday in a bid to freeze a Dh57 million (US$15.5m) payout from Nakheel to another investor.

Safi Qurashi, 43, spent 30 months in prison after being found guilty of bouncing cheques. He was at the Dubai World Tribunal yesterday as the investor, Shokat Mohammed Dalal, won his case against Nakheel over a disputed deposit paid for three islands on The World, a Dubai World project developed by Nakheel.

In a highly unusual move, Afridi & Angell, acting for Mr Qurashi, requested the Tribunal freeze the money awarded to Mr Dalal because he and Mr Qurashi were involved in a separate civil dispute in the Dubai Courts.

Dubai Group has seen its stake in Cyprus Popular Bank diluted and the value of its holding plunge dramatically following a state bailout of the lender.

Cyprus Popular Bank, formerly known as Marfin Popular Bank, was forced to seek state support this summer as the effects of nearby Greece's recession hammered earnings at the island's companies. The cost of propping up Cyprus' banking sector forced the Cypriot government to request an international bailout.

But the effect of the bank's capital increase was to dilute Dubai Group's stake significantly.

Egypt’s president said on Monday he would not impose new taxes or devalue the country’s currency and that his government would rely instead on investment, tourism and exports to fix an economy ravaged by a year and a half of political turmoil.
Mohammad Mursi, 61, has a window of opportunity to push through economic change while he still commands political goodwill 50 days into his tenure as Egypt’s first freely elected president, economists say.
Yet he must tread carefully to avoid angering a population that rose up to topple Hosni Mubarak last year partly because of high inflation and the widespread belief that the fast economic growth in the last years of the former president’s rule was not reaching the poor.